A caller asked Cramer about Francesca Holdings (FRAN), a specialty retailer of clothing, jewelry and accessories which had its IPO this summer. The stores have a boutique feel, and offer high-end products at relatively low prices. The IPO started at $17, rallied 63% the first day, but has fallen back to $20 since. Cramer admits he is undecided on Francesca's because it is an untried and unproven retailer, and the stock is in "no man's land"--too expensive to buy, too cheap to sell.

At first glance, Francesca's story looks compelling. It is opening up stores at a rapid pace, increasing its 279 locations by 75 this year alone, and it has room for 900 locations before it reaches saturation point. The growth in new stores is at 39% and FRAN expects to grow revenues by 40%. The not so good news is its same store sales, which have slowed to around 5%, down two-thirds from last year. The slowing down of same store sales is not what investors want to see from a retailer that is aggressively building new stores. Cramer says he needs to see at least one or two quarters with positive comps for sales from new stores before he can recommend buying the stock.

Cramer took some calls:

HHGregg (HGG) is in a hard cohort, and while it is better than Best Buy (BBY), Cramer prefers Costco (COST).

Target (TGT) may be featuring merchandise from a popular designer, but this is not enough to move the needle in the stock. High-end retail like Coach (COH) is a better buy or low-end plays like Dollar General (DG) are better stocks than mid-range names like Target.

Skullcandy (SKUL) missed its earnings right after its IPO. Cramer thinks this puts SKUL in the penalty box for a while.

How did the Dow rally 186 points on bad news about manufacturing, retail numbers, inflation, continuing European woes and worries over China? Cramer explained:

Retailers: While the jobless numbers were dismal, there is hope that President Obama may be successful in extending unemployment benefits. When these benefits are extended, retailers tend to rise.

Industrials: The Federal Reserve data from various regions of the U.S. indicate that manufacturing is slowing. However, industrials, most of which are down double digits are priced for recession, and can't go much lower. Anything short of a recession should bring these stocks back up. In addition, Cummins (CMI) reported that business was going "gangbusters," and Caterpillar's (CAT) stock still rose even after a firm cut its numbers.

Financials: Rising inflation is bad for banks, but Treasury Secretary Tim Geithner gave the nation hope that at least there would not be a Lehman-like crisis in Europe. The last 20% drop in the financials was based on worries about Europe rather than inflation domestically.

Oil: Oil has done nothing lately, but if Europe doesn't sink, drillers will see gains in their stock prices.

Tech: While tech is heavily levered to Europe and Europe is in the doldrums, seasonality will come to the rescue. In 9 of the last 10 years, tech has performed well, staring in mid-September. Cramer thinks this positive seasonality will trump issues in Europe. The Philadelphia Semiconductor Index, or the SOX, has performed well this week and good news from Texas Instruments (TXN) about a dividend increase and an acquisition will be good for the sector. Even Automatic Micro Devices (AMD) might be a buy, and there is no reason to worry about RIM's poor quarter; it is just another reason to buy Apple (AAPL), which is headed toward its 52-week high.

The bottom line: We've caught a positive wave, but Cramer warned that the best waves can abruptly end. While there is reason to be confident, investors should remain cautious.

Pier One Imports (PIR) has been a dramatic comeback story, rising 7,600% since its decline to 15 cents during the Great Recession. The stock is up 28% since Cramer recommended it in April of last year. PIR is one of the largest retailers of decorative home furnishings, and it has improved its selection and the appearance of its stores. The company has invested a substantial amount on television advertising and has closed down non-performing stores. PIR reported an in-line quarter, meeting earnings estimates of 14 cents and slightly exceeding expectations for revenue growth at 9.6%. The stock has declined by 2% on a strong day, and Cramer wondered whether this could be a buying opportunity.

CEO Alex Smith discussed the increase in buyers from 10 to 24, and how that has impacted the selection and appearance of the stores. While economic conditions are a concern, Smith said the market share of the company is modest enough that it will not likely be adversely affected by a slow economy, and given its customer loyalty, it can raise prices without losing customers. While costs have risen in China, Smith says costs are being cut in other areas so these increases do not need to be passed on to the customer. PIR plans to expand locations in the U.S, especially in certain areas in New York. Cramer asked Smith why the company bought back stock when it has already risen substantially, and Smith replied that this move is ultimately good for the shareholders. PIR has enough cash to invest in the company and in advertising.

A great way to play the oil production boom is through pipeline companies. A leader in this sector is Enbridge (ENB), which owns the largest oil and gas transportation system in the world. Enbridge's earnings are consistent, like those from a toll road, and are not exposed to substantial risk. ENB's partner, Enbridge Energy Partners (EEP) offers a higher dividend, but ENB, yielding 3.1%, has strong growth. ENB's pipelines move 2 million barrels a day, and there are significant opportunities to expand, especially in the Bakken. CEO Patrick Daniel discussed possibility of greater energy efficiency in the U.S, as production in the Bakken continues to soar. The pipeline industry is able to create a substantial number of jobs, further improving the economy. Cramer is bullish on ENB

Cramer put a post-it note on his head to express his regret for staying in Netflix (NFLX) after the company announced price increases for its DVD delivery service. Cramer believed this was a strategy to drive subscribers to its higher cost streaming videos, and that Netflix customers would be too loyal to jump ship. However, the move turned out to be ill-conceived, as DVD subscribers dropped from 3 million to 2.2. million. In addition, competition in the industry is making the Netflix story a harder sell. The faith in Netflix's management and the strength of its past performance led Cramer to be more bullish than he admits he should have been. "I was too greedy, the biggest sin of all." Even though Netflix is likely to see another bounce, Cramer would sell the bounce and move on.